In-work poverty in Europe: a study of national policies

Getting people into quality jobs is key to achieving the European Union’s (EU) ambition of fostering upward convergence in living standards across all Member States. Preventing in-work poverty (IWP) is seen by policymakers and stakeholders alike as part of the overall goal to reduce poverty in the EU.

However, while working is generally considered as the best way to avoid poverty, this is not the case for a significant number of European workers. In 2017, 9.4% of all EU-28 workers lived in households that are at risk of poverty, i.e. an alarming 20.5 million persons.

Based on the in-depth national contributions prepared by the 35 ESPN Country Teams and an analysis of EU indicators on IWP, this Synthesis Report produced by the ESPN outlines five key findings:

• The in-work poor represent a substantial group among workers and their numbers continue to grow in many European countries, leading to a polarisation within the EU.
• In certain categories of the population (mostly young, low educated, non-standard workers, poor households with children including lone parents, workers and households with low work intensity) IWP is significantly higher and has in some cases been increasing significantly in recent years.
• Governments typically combine a variety of measures (such as minimum income, minimum wage, income replacement or supplement, active labour market policies, tackling labour market segmentation, family and in-work benefits) that directly influence IWP. However, most often IWP is not a stated policy goal. Moreover, a number of other policies and measures (such as childcare, housing and healthcare) which may only have an indirect impact on IWP are equally important to address this complex issue.
• Though the issue of IWP is not extensively discussed in policy discourse and action, most of the countries accelerated the pace of related policy reforms between 2015 and 2018.
• The commonly agreed EU indicators of IWP are a good basis for understanding and monitoring IWP, but some additional breakdowns of these indicators (such as IWP rates before and after social transfers) should be available on the Eurostat website.

This Synthesis Report puts forward several recommendations and calls for more effective policy action at European and national levels to tackle in-work poverty.